[ET Net News Agency, 5 February 2018] Daiwa Research lifted its target price for
Guangdong Investment (GDI)(00270) to HK$12.8 from HK$12.5, and maintained its "outperform"
rating.
On 1 February, GDI announced that it will participate in a JV that has won the bidding
for a water pipeline PPP project in Yangjiang, Guangdong. As GDI is mainly engaged in WWT
and water supply, this is the company's first sizeable water pipeline project, said the
research house.
Daiwa expects the project IRR to be a high single digit (8%), comparable to GDI's
existing projects. Thus, it estimated the JV would receive CNY110m of an annual usable fee
(besides an operating performance service fee) from the Yangjiang Government and GDI will
start to book a profit from the JV upon its commencement of operations (probably 2021).
It believes GDI will be able to maintain its target 20% DPS CAGR (achieved for 2008-16)
at least over 2017-19, given its HK$11.2bn of cash on the balance sheet at end-1H 2017 and
at least HK$4.8bn in cash flow at the Dongjiang project. (KL)
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00270 GUANGDONG INV
Nominal 
3.780 +0.090 (+2.439%) Others
05/02/2018 11:30
[I-bank focus]Daiwa lifts Guangdong Inv (00270) to HK$12.8
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